HUD Announces $3.92B Package to States for Neighborhood Stabilization
- Sep 26, 2008
By Anuradha Kher, Online News EditorWashington, D.C.–U.S. Housing and Urban Development Secretary Steve Preston today allocated a total of $3.92 billion to all states and particularly hard-hit areas trying to respond to the effects of high foreclosures. HUD’s new Neighborhood Stabilization Program (NSP) will provide targeted emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities.In a telephone press conference held this morning, Preston said, “This money can be used to buy properties at a discount, rehabilitate properties and even assist people who want to buy by making their down payments.” HUD plans to host a national housing summit in Washington, DC on Oct. 7-8, as well as a series of regional conferences to explain the details of this new program to governors, mayors, county executives and other state and local leaders. “State and local governments will create plans which HUD will review to ensure that they are consistent with the legislation,” said Preston. At the same time, HUD will provide guidelines on how to make these plans. HUD has taken several factors into consideration—including foreclosures, sub-prime loans, mortgage delinquencies—and has come up with a formula that communities can use to formulate their plans.The funding is provided through HUD’s Community Development Block Grant (CDBG) Program under the Housing and Economic Recovery Act of 2008. In determining the allocations announced today, HUD followed Congress’s direction that grants be targeted to areas based on the number/percent of foreclosures, subprime mortgages and mortgage defaults and delinquencies. HUD took a data-driven approach to this process, relying on numerous data sets from government agencies and private sources.HUD will also issue specific rules that will assist communities in the administration of this new program and ensure, as Congress directed, that these grant funds be allocated for specific activities within 18 months.